The ‘New Politics of Inequality and the EU Referendum’ via a Facebook squabble

Politics through Facebook

This week I was prompted to remember the birthday of one of my oldest school friends by a helpful message from Facebook.  I didn’t really need a reminder, but nevertheless I responded to Facebook’s exhortation and dutifully posted the obligatory – if low key – ‘Happy Birthday’ message on his Facebook page.

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But I don’t expect a response, and perhaps I don’t deserve one.

On Friday June 24th- – the morning of the EU referendum result – I foolishly entered into a Facebook quarrel with this old friend.  He was posting in muted but triumphal terms about the decision to leave the EU, and I objected to some of the explanations used.  He obviously received several posts and messages that were negative, and, despite some enthusiastic support from others in his network, he posted on Saturday morning that he didn’t want to offend anyone and would delete the posts in question.  I suspecthe thought some people – and I fell into that camp – were sore losers and should ‘just get on with it’, but like his initial post his tone was polite, consensual and intended to pour oil on troubled waters.

So why had his posts motivated me in the first place?

Frankly, the reason was that I recognised his concerns.  He explained his antipathy toward the EU as a result of concerns about de-industrialisation, the loss of well paid and secure employment.  He was worried about the social implications of this; in terms of increased insecurity and a sense of disruption of the local communities that had relied on these industries. I know from our friendship that he and his family are long-standing members of those communities which they hold dear. His values are of commitment to place and others.

In the wake of the referendum many remainers have poured scorn on leavers, accusing them of being uninformed, motivated by racism, xenophobia and simplistic nationalism.  All of these are easy to dismiss as the product of a lack of education or rational thought.  But my friend’s posts did not fall into any of these categories. He was thoughtful, well informed and motivated by a commendable and deeply held commitment to community and place, and concerns over the insecurity of both.

What is also notable about this friend is that he has been successful in adjusting to the changes he bemoans. He is well trained and qualified, and I assume reasonably well paid in a high skilled job.  His concerns are about material changes in the communities he values, but they are not sour grapes from a loser in the globalisation story.  He was expressing concerns about the wider and common effects of global economic changes, of which European integration was just one part.

I clearly should have been more cautious with my response to my old friend, and hopefully in time our spat will be forgotten.  The irony is of course that his concerns very much feature in my own research.

indexThat same weekend similar – albeit more consensual – discussions between myself and a range of academic colleagues, also facilitated by Facebook, suggested a more hopeful trajectory.  The Facebook ‘echo chamber generated’ new friends too – all motivated by the EU result and concerned about the need to do more to engage with the political concerns that motivated my friend.

We all recognised that we have been too insular, too concerned with metrics of student satisfaction, research impact and academic reputation to spend sufficient time on the politics of the real world.  As the algorithms of social media generated a discussion of increasing numbers of like minded colleagues, more than 250 of us joined a discussion. The result was that we rather quickly formed a new think tank – InformED. I hope that in the months and years to come you will hear more about our work, for that will suggest that we have carried through our commitment to reach out beyond the confines of the University lecture hall and academic conference room.

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So aside from introducing InformED, it is the links between the EU referendum result and my research on ‘the New Politics of Inequality’ that I want to tease out in this (admittedly over-long) post. I have two core arguments.

The first is that the pressure for the referendum and the result were partly generated by a ‘New Politics of Inequality’.

The second is that if we are to leave the EU, then it is vitally important that this process is undertaken in a way that involves us all taking greater political responsibility.  For their part, politicians need to take responsibility for the social divisions they have created. Critical academics like me and my colleagues in InformED, have a responsibility to reach out beyond the academy to influence this, and the wider public have a responsibility to engage with political debate in a more substantive way.

The New Politics of Inequality From Below

In a paper, currently under review and co-authored with Daniela Tepe-Belfrage, we argue that levels of inequality in the UK are fracturing the political consensus that had been reflected in the post-war middle class.  In a paper published in 2014 I argued that during the 1980s, Thatrcherism had sought to separate out different sections of the working class, seeking to differentiate between a deserving skilled working class able to cope with increased competitiveness and those less able to cope. This has been a long-running trend; the current government has repeatedly sought to emphasise its support for ‘hard working families’ against the ‘undeserving poor’.

The argument made by Daniela and I is that the specific forms taken by socio-economic inequality in the UK are now undermining both one and two nation attempts to build political compromises. The much vaunted ‘new middle class’ of the 1960s and 70s sociology text-books is fracturing.

For one thing, the long-term prospects of this group now look less secure.  As I argued in my inaugural lecture, the generation now in their twenties and teens look like they will be the first to be considerably worse off than their parents.  The exception to this is where families have acquired housing assets to pass between generations sufficient to protect those now in their teens and twenties from increased insecurity.  In buy-to-let mortgages at one end of the spectrum and increased private renting at the other, the housing and credit markets are acting as a significant mechanism of upward redistribution.


For another thing, those families affected by these changes increasingly recognise their own declining security.  As the recent data from the British Social Attitudes survey shows, concern with inequality is increasing, as it has done for some time.

It is this recognition that has fueled the emerging realignment of British electoral politics.  Just before the last general election the British Social Attitudes Survey showed that UKIP voters were just as likely to be concerned about inequality as were labour voters.  While some groups mix these concerns with more cosmopolitan cultural politics, others express them through more conservative cultural views.  The former group might be more likely to be young, urban and highly educated (or just living in Scotland!); the latter more likely to be out of the major urban centres, older and less well qualified.  Without over simplifying things, the former group may be more likely to be among the ‘Momentum’ group supporting a new extra-party popular mobilisation behind Jeremy Corbyn. The latter group are more likely among the ranks of labour and conservative supporters who have switched to UKIP in recent years.

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Ashcroft Poll data shows common concerns about insecurity among remainers and leavers.  Click on the image to goto the Ashcroft Poll site.

As the Ashcroft polls show, these shared concerns and divergent interpretations of them were neatly aligned with the propensity to vote remain or leave in the EU referendum.  Leave voters were more likely to be socially and culturally conservative while remainers were more likely to be socially and culturally cosmopolitan and outward looking (see graphics below). But both groups (see graphic above) were influenced in their decisions by concerns about economic insecurities and the effects of these on social and community stability.

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Ashcroft polling data showing the social and cultural values of remainers versus leavers.  Click on the images to goto the Ashcroft site for more data.

These patterns are not just present in the UK, they are echoed across Europe and North America. In the US presidential elections similar patterns of support can be seen for Bernie Sanders versus Donald Trump.  The Five Star movement in Italy, the formation of Syriza in Greece exemplify the leftward reaction. On the other hand the rise of the far right parties in France, Austria, Denmark and the Netherlands and the Pegida movement in Germany demonstrate the counter trend to view polarisation and insecurity through the prism of cultural stasis and fear of the other.  Perhaps more significantly the New Politics of Inequality is also manifest outside of electoral politics in the expressions of protest such as Occupy or the Indignados in Spain, or the rise of far right protest movements all across Europe.  Evidence can be found also in declining popular confidence in political institutions.

The New Politics of Inequality then are fracturing the post-war consensus in the highly developed nations of the North America and Europe, from both left and right.  Inequality and cultural change are popularly viewed negatively on both ends of the political spectrum.

The fracturing of the new middle class is perhaps realising Marx’s prophecy that the class structure would evolve into two great and opposing classes. The sloganeering of the 1% versus the 99% seem to suggest that.  However, it seems that the 99% are definitely not drawn together in a cohesive class consciousness by their common economic realities, but are fractured both within and across countries on their cultural response to those economic realities.

The EU referendum result represents the most significant real world expression of this so far in terms of UK, European and even global politics, though the US election result may clearly trump(!) it.

The New Politics of Inequality from Above

Several of the other papers I have written recently have addressed what might be called here the ‘New Politics of Inequality from Above’.  Here I refer to the elite concern about levels of inequality being politically, economically and socially destabilising. This concern has been emergent over the last decade, but is particularly pronounced since the great financial crisis of 2008.

Evidence of this concern can be drawn from the policy documents of significant international organisations such as the International Monetary Fund, the Organisation for Economic Cooperation and Development, World Bank and the World Economic Forum.  These organisations have different roles and functions, but collectively one of the things they do is act as the think tanks and ideas forums of elite policy knowledge.  Social, economic and political changes are interpreted by these organisations as particular problems for the status quo.  The OECD began to worry about inequality first, but all of them have published high level papers rendering inequality as a policy problem over the last five years, as I discuss in a paper published in Spectrum late last year.

Of interest here is that the European Commission definitely qualifies as one of those transnational organisations that has had influence in shaping the elite interpretation of ‘problems’ that national governments choose to focus on and frame particular responses to these in terms of recommended – and in the case of the Commission sometimes mandated – policies.  It is also the case that inequality has featured on the list of concerns the Commission has raised over the last five years.

The key terms of this new politics of inequality from above are that inequality is not rendered by these elite think tanks as an ethical problem.  This new politics does not represent a ‘road to Damascus’ moment for these organisations. Rather they are concerned precisely because inequality might now be seen as a ‘risk’ to the stability of globalisation.  As such they are busy trying to persuade national governments to take these risks seriously.

This new politics of inequality from above was clearly apparent in the EU referendum process.  For years policy elites have sought to exploit social differences to manage the process of disciplining their populations to accept lower wages, and in some cases lower standards of living also.  This has been possible politically, precisely because elites have mobilised fear and sometimes nationalism to generate this division.  Politicians have regularly sought to use the image of the immigrant, the welfare or health tourist or the domestic welfare benefit recipient as a negative foil for generating support among the rest of the population.

However, that fear and xenophobia is now rather like the ‘Sorcerers Apprentice’; its animated spirit has got out of hand is undermining the position of established elites.  Specifically in the UK, both Labour and Conservative Parties have played the ‘immigration’ and ‘race’ cards, exploiting fears over insecurities to court popular appeal.

Indeed, the now defining moment of Gordon Brown’s tenure as Prime Minister might be thought of as the moment that he unguardedly let slip his discomfort with that narrative when commenting that he thought remarks made to him by a Labour party supporter about migration were bigotry.

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Of course when he realised (see the image above from the Telegraph website capturing the moment) he had been recorded making these comments he immediately back-tracked and offered profuse apologies for ever even thinking about challenging fear expressed as xenophobia. The episode is still referred to as evidence that Brown was out of touch with popular opinion, and – no doubt encouraged by the party machine – he certainly did not try to challenge this populism. It was an episode that demonstrates the cultural divergence in responses to inequality, its manipulation by politicians and the way that this is now hard to control.

But in the run up to the referendum vote, elite concern seemed ever more shrill in the face of the evidence that the Sorcerer’s broom might now be beginning to act on its own motivation, and out of their control. As the campaign progressed and opinion polls showed a close contest, the array of large businesses and elite policy think tanks became increasingly willing to enter the fray.  The supposedly neutral civil service machine also strained at the leash to get involved to put public opinion back in its place, as both the Treasury and Bank of England – the oldest and most central institutional structures of the UK state – sought to raise their own fears of what a Brexit vote would mean to the elite transnational status quo.

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The elites were trembling, and, as it turned out, they had good cause.  The sight of Bank of England governer Mark Carney standing in Threadneedle Street promising that the Bank would step-in to rescue the financial markets, and stablise the global financial system, was evidence of how seriously those elites were rocked. That other Central Banks immediately joined forces to make the same promises is only evidence of the transnational nature of those elites.

Why has inequality risen?

Again, I and many others have addressed the underlying reasons for rising inequality in a number of places, such as my talk in launching the Global Inequalities research cluster at Leeds Beckett, and in a workshop paper to an ESRC seminar at Goldsmiths University late last year. There is also no shortage of explanations. Again, the OECD, the IMF et al. have all jumped on the bandwagon of explaining rising inequality.

The most remarkable thing in terms of the New Politics of Inequality is that the explanations put forward by these elite organisations now are remarkably similar to those put forward for a long time by critical scholars in international political economy and the wider social sciences.  Ofcourse the different proponents of these explanations place varying degrees of emphasis on different parts of the explanation, and often use different language to describe them.  Semantics aside the more or less accepted basket of factors that have increased inequality include:

  • Increasing competition resulting from increased openness to trade and, in some circumstances, increased migration, also. Migration though tends only to have shorter-term and more localised effects and it should be remembered that the migrants themselves are the subject to the negative effects of this competition.
  • Offshoring and globalization as some industries and occupations have moved overseas.
  • Skill Biased Technological change – resulting from the substitution of machines and computers for labour, meaning some occupational roles have disappeared while other more skilled jobs have attracted higher wages.
  • Privatisation of state owned enterprises, which has invariably put a downward pressure on wages in public sector employment, often more dominated by women.
  • The decline of trade union membership and collective bargaining.
  • Labour market policy, including anti-trade union legislation and reduced employment protection legislation.

Of course where critical scholars and the elite international organisations part company is that these are the very changes long-recommended by the OECD, IMF etc.  And in the face of rising inequality and social destabilization they still recommend that the answer is more competitiveness.  But, as Paul Cammack has long argued, pursuing competitiveness as a solution to the problem of increased competition is a fairly circular argument.  Its hard to find a different path out of a tricky situation if one is going in circles!

The European Union and the New Politics of Inequality

European integration was very much the product of the post-war international compromise; motivated by geo-political desires to tie the countries of Europe together in a peaceful free-trade zone of collaboration, while bolstering them against the threat of Soviet expansion. These geo-political concerns suppressed and held in check the tension between two important component elements of EU integration. These were first a political and social liberal project to spread and realise the individual rights of citizens through constitutionalism ;and second an economic liberal project to promote market integration.

After the end of the Cold War the geo-political suppression of tensions between these two projects was removed, and the market liberal project began to emerge as dominant.

As Paul Beeckmans and I argued in a recent paper, the process of economic meta-governance in EU integration has increasingly pursued the objective of economic competitiveness to the detriment of concerns to build a ‘Social Europe’.  The suppression of wages and living standards has been encouraged by the European Commission as an element of EU integration to meet these ends.  If in any doubt about this, just ask the Greek population that has been at the harshest end of this discipline over the last 6 years.

In sum, EU integration has increasingly taken on the concern with competitiveness that has generated the inequality underpinning the damaging ‘new politics’ I describe above.  So, if I am so critical about EU integration as was my friend and the wider ‘Lexiteer’ (Left wing leave voters) campaign right about the need for the UK to leave the EU?

My answer would be ‘no’, on several grounds.

First, while the EU – and the European Council and European Commission in particular, have worked to promote competitiveness at the cost of greater inequality and social tensions, they did not really have this impact in the UK. That is principally because the UK government (under all political parties) has always run ahead of the EU in these objectives.

Indeed, many other Member States have often complained about the role of the UK in encouraging market-oriented reform in the wider EU.  While European integration has been consistent with the types of reform that have realised the New Politics of Inequality in the UK, it has not been a cause of it and at times has acted as a substantial drag on UK ambitions.  Constant debates over the implementation of EU directives strengthening workers rights are prime evidence of this, with the UK often being oppositional in the European discussion on these matters and sluggish to implement the resulting watered down versions that could be agreed in the face of UK objections.

Second, the majority opinion among the political elite (among remainers and leavers alike) is that leaving the EU should be complemented by immediately rejoining the single market or negotiating other equivalent trade deals.  Leaving aside the difficulty of this, as pointed out by Gabriel Siles-Brugge, the direct implication is that leaving will see more market oriented reform and a greater dominance of the economic liberal project over the political liberal one.  Put simply, as Ruth Cain also persuasively argues it will accentuate the conditions which generated the New Politics of Inequality in the first place.

Third, the subordinated aspect of EU integration – shared citizenship, a European identity, the idea of peace and cooperation between nations, cosmopolitan values of tolerance and openness, individual rights and Europe’s great gift to the world: the idea that we collectively have a social and economic responsibility to one another, as expressed through the institutions of a welfare state and social protection – may all be on the back foot, but they are not gone.  We should be promoting a radically different Europe that defends and promotes these values, not turning our back on it.

Where to now?

Plenty of commentators have spent the last week worrying about the precise ways in which the fallout from Brexit will play out in terms of the potential for a second referendum, Scottish cessation from the Union and the politics of Party leadership.  The blogosphere is alight with this stuff and it is all many of my colleagues, friends and acquaintances have been able to talk about since July 25th.  It is not just ‘lefty academics’ either. I have overheard conversations in shops, on public transport and in pubs that all suggest a very much heightened interest in politics and a dawning realisation of the dynamics I describe above.  These things are clearly significant and comment worthy in themselves.

However, the big story here is not so much the contingent terms in which the immediate processes of responding to the vote pan out.  Rather, it is in the underlying socio-economic trends and their rival interpretations in cultural politics. The apparent rise of racial harassment and violence is one immediate expression of this, but so too is the widespread antagonism between the two sides of the debate. My Facebook spat is clearly part of this!

In the fallout then there is increased responsibility on all sides.

Politicians have a clear responsibility to engage with the problems in place of Westminster games.

Academics, such as those coming together in this new think tank, have a duty to do more to engage with public opinion and inform scrutiny of politicians. Critical academics working in the fields of international political economy, sociology, social policy, European studies and critical management studies have long been aware of rising inequality and its consequences in the form of alienation and disenfranchisement.  It is crucial that those critical analyses find their way from the lecture hall and conference room to the public debate.  We need to do more to engage the public directly and to influence the political debate in the media.  This is the objective of my colleagues who have come together to create InformED.

The public also have an obligation here.  The stories over the last week or so about Brexit voters immediately becoming ‘regrexiteers’ when the implications of their actions became clear and about the prominence of ‘What is the EU?’ searches on Google suggest a democratic obligation to be better informed before contributing to collective decisions.  They also suggest an increased realisation of this.

Acting on these responsibilities is no ‘academic’ issue.  It is of vital importance if we are not to travel further down the road of cultural divisions.  As a divided nation we are easier to rule in the interests of the few and not the many.  Divergent cultural political reactions to common insecurities risk the many blaming each other for our common inequalities, and letting the few of the hook.

Moreover, these circumstances – common insecurities, fear of the future, disenchantment with existing institutions – look much like the political conditions that led to the downward spiral into the Second World War. I don’t say we are anywhere near that now, but we are closer now than we were, and the warning signs are clearly there.  It is imperative that we all act now to ensure that we do not travel any further down that path.

 

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Punishing the poor

George Osborne is to open the Conservative Party conference today with a promise to further tighten benefit conditionality and introduce workfare style responsibilities for the longer-term unemployed.  His leaked speech is quoted in the press today as including the following comment:

“For the first time, all long-term unemployed people who are capable of work will be required to do something in return for their benefits to help them find work…But no one will get something for nothing. Help to work – and in return work for the dole.”

This is apparently popular with the public.  Polling evidence from a number of sources, not just the right wing Policy Exchange think tank that is cited in this morning’s press, continues to suggest that the public support more draconian conditions on the unemployed.

The problem with this is four-fold.  First, there is no evidence that workfare is effective, and on the contrary may be damaging to employment chances.  Second, increasing competition among the unemployed for low quality work may have negative economic effects (as I blogged about two weeks ago in response to ONS international productivity figures) as well as damaging effects on the wellbeing of unemployed jobseekers, making them less likely to be able to work.  Third, public support for further welfare cuts is more mixed than the figures at first reveal and is based on misinformation of the sort that occupies today’s media and the Chancellor’s speech.  Finally, when this is taken together – and Osborne knows all this – the only possible reason for continuing to talk about, let alone implement, further welfare cuts, is to punish the poor and sick.

First then to the evidence.  A review of the international comparative evidence on workfare conducted by researchers at Sheffield Hallam University for DWP in 2008 concluded that:

“There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers.”

Paul Gregg, who advised the previous government on the establishment of the Employment and Support Allowance, also conducted a review of the available evidence on Workfare and argued that it could result in ‘lock-in’ effects preventing people from accessing opportunities in the labour market.  This is not to say that no scheme that boosts jobseeker’s work experience, confidence and motivation while unemployed can work.  It is just that the specifics of workfare: work for your dole, is not shown by research evidence to be effective, and it might be damaging.

Second, I blogged last week about international productivity comparisons.  Britain falls behind some of its competitors on productivity measures.  Part of the reasons for this is that since the Thatcherite restructuring of the 1980s the UK economy has had a low wage / low value added problem.  Measures which simply provide employers with an ever-ready supply of cheap labour and no incentive to retain, train and invest in their workforce and fixed capital have a dampening effect on productivity. The current approach to welfare is just this.

The September labour market statistical analysis shows that there are two and a half unemployed people, around one and a half million people who are working part time because they cannot find full-time work (ie they are under-employed), and a further two million who are economically inactive for reasons of sickness, some of whom may well be discouraged workers.  Set against this there are around half a million vacancies.  Even accepting that vacancies are often under-reported in official statistics, this suggests that there are more people wanting jobs than there are jobs available.

The effect therefore of pushing ever more people to compete for those jobs is to further depress wages and leave many of those who are forced to compete for work even more discouraged because they had very little chance of success in the first instance.  What is needed for these jobseekers is support to build their skills and confidence, not punitive measures and negative political rhetoric.

Third, it is true that public opinion polling shows support for harsher welfare measures.  However, if you look beyond this headline data a slightly different and more complex pattern emerges.  First, this is a long-term trend.  As politicians have become more willing to direct political rhetoric at benefit recipients, so public opinion has hardened toward them.  Second, as a TUC study shows, the public is badly misinformed about welfare spending in relation to the comfort of life on benefits and the level of spending on out of work benefits as opposed to pensions and in-work benefit payments to subsidise low wages. In 2011-12 Government spent nearly £75bn on pensions and £30bn on tax credits to low paid families.  In the same year Jobseekers Allowance amounted to just under £5bn and the combination of Employment Support Allowance, Incapacity Benefit and Income Support (all paid for different reasons of not being able to work such as ill-health or child care responsibilities) accounted for just short of £17bn (see the data here).  What’s more, the propensity to misunderstand the level of welfare spending is positively related to the likelihood of reporting harsh views toward benefit recipients.  Further, the TUC research continues to show considerable support for the general principle of the state helping the least well off.  Public opinion, when well informed by mature and reasoned debate is much more supportive of welfare than we are led to believe by populist portrayals by media and politicians alike.

So if the evidence base does not stack up, why is Osborne pursuing this agenda?  It could be explained if he was simply naive and didn’t know what the evidence suggested, but he is surrounded by advisers and the DWP’s enormous collection of research.  The uncomfortable suspicion remains then that Osborne is simply punishing the poor, for a set of economic conditions for which they are not to blame.

What is needed instead are policy interventions motivated by solidarity with the least well off in society to tackle barriers to work in a supportive environment, build confidence and work experience, but without further cheapening labour or demonising recipients.  Design and language matter.  Schemes that encourage rather than force participation, support training, tackle barriers to work and genuine help in looking for sustainable employment matched to capabilities and aspirations are all to be preferred to the simple and all too easy ‘dog whistle’ politics of populism.

Additional references:

Crisp, R. and D. R. Fletcher (2008). A comparative review of workfare programmes in the United States, Canada and Australia. Norwich, DWP.

Gregg, P. (2009). “Job Guarantee: evidence and design.” Research in Public Policy 8: 11-13.

ONS Productivity Figures Suggest a Different Labour Market Policy is Needed

Data released by the ONS this week show that the UK economy has fallen behind on productivity when compared to competitors like the US, Germany and France.  To those well versed in these statistics, it is old news – they always show that the UK has a productivity gap with these economies. What is new, is that during the 2000s some of that gap narrowed, but since the onset of the current economic crisis in 2008, that gap has again been growing.  The big problem for the UK is that employers in this country have held onto labour in the context of falling output.  Ofcourse, in may ways this is good.  It has helped keep the labour market – employment and unemployment – in a better shape than it would otherwise have been.  The downside of this is that workers have accepted stalled wages and falling standards of living to square that circle.

The implications of this in the longer term, pose significant challenges for labour market policy.  At the Work Employment and Society Conference a week or so ago I gave a paper which argued that the implementation of Active Labour Market Policy across Europe, and particularly in  the UK, was stuck in the early 1990s.  My paper suggested that the way that Public Employment Services manage their activities is excessively focused on discipline and ‘activation’ – forcing the unemployed to apply for any job.  I suggested that instead they should reorient themselves to focusing on the European Commission’s Public Employment Services Strategy which emphasizes the importance of ‘Transitional Labour Markets’.  This approach, following the ideas of Gunter Schmid, suggests that governments should use labour market policy to encourage those who can to apply for work now, while seeking to upskill others and even recognizing that there are points in the lifecycle when employment is not the best option, or that it should be combined with other responsibilities such as caring for children and other relatives.

Such an approach would though need to break with the idea of pushing competitiveness down to the individual level – something I have blogged against here before.  The lessons from my paper and yesterday’s ONS data is that labour market policy needs to change.  This is particularly so in the UK, where the current emphasis on discipline and activation simply provides employers with a ready supply of cheap, sometimes free and state subsidised labour, that they have little or no incentive to retain, train or value.  In that context, if a recovery of output were to emerge, employers could simply employ more cheap labour and avoid the costs of capital and productivity enhancements. The result would be that the UK economy would retain its comparative low skill equilibrium.

In place of this, labour market policy needs to shift away from disciplining the poor and toward a holistic view of what is good for households and good for the economy and society at large.  That will mean working to increase skill levels, combatting poverty (as a right and not an uncertain potential reward for competing for low quality employment), and that economic problems are to be found not just on the supply side of the labour market – but on the demand side too. I’ll be making some of these points at the Public Employment Services Dialogue conference in Brussels in two weeks time.  I hope those assembled will listen.